Smart contract (English: Smart contract) is a computer protocol designed to spread, verify or execute contracts in an information-based manner. Smart contracts allow for trusted data exchanges without third parties that are traceable and irreversible . The concept of smart contracts was first proposed by Nick Szabo in 1995.
In layman's terms, a smart contract is a piece of code written on the blockchain. Once an event triggers the terms in the contract, the code is automatically executed. In other words, it will be executed when the conditions are met, without human control. Rather than talking about the smart contracts of the blockchain, it is better to say that what everyone currently understands is the smart contracts of Ethereum. It can be said that Ethereum created smart contracts.
Smart contracts have many advantages
First, by removing the third party intermediary platform, users can fully rely on technology to establish contracts independently.
Second, it is fair, open and transparent. The smart contract will clearly write the terms and conditions in the form of code and record them on the blockchain. The entire process is executed by the program. Even the developer who wrote the contract code can Cannot be tampered with.
Third, the application of smart contracts is also very flexible. Users can freely establish contracts with each other. Even a strange foreigner can establish cooperation and contact through smart contracts.
The non-tamperable nature of smart contracts makes it easy to establish trust. But there is also a bad side. If there are loopholes in the smart contract, hackers can exploit the loopholes in the smart contract to make profits for themselves.
On the other hand, the smart contract itself cannot obtain (perceive) external information. It requires external information to rule on the contract, and relevant information needs to be written into it before it can make a decision. For example, when Xiong Da and Xiong Er guess whether it will rain tomorrow, the smart contract itself does not know whether it will rain the next day. It needs to provide information through other information sources, such as weather station data. With this information, the smart contract to make a ruling.
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